stakeholder management

Case Study2 & 3 – Prototyping of CSP Technology and Construction Prototyping of CSP technology as part of Desertec – Case Study 2 The Desertec concept planned for CSP plants to be build in the Sahara. At the time CSP and Photovoltaic were the two solar technologies having reached commercial development. These two technologies were competing for the cost leadership on a utility level. The key-performance indicator is called levelized-cost-of-energy generation (LCOE) which describeds the overall cost of a plant. Based on this cost figure the developper/utility can negotiate a power purchase agreement (PPA) with the utility or local electricty board. Alternatively, the LCOE is the basis on which a government may grant subsidiaries. The LCOE is based on the costs (depreciation, financing, operation, fuels) divided by the energy produced. Only if the LCOE is lower than what an operator could earn with a PPA, subsidies or tarif than the plant will be further developed and constructed. Negotiation between developer / construction company on the one side and utility/government on the other side revolve around the LCOE. As the LCOE is based on a number of factors and need to be calculated by a mathmatical model, the contractual details are far reaching. The agreements cover all possible shortfalls (construction risk, grid connection, licensing, tax issues, environmental framework). However, planning and construction take 4 respectively 2 years, which require stakeholders to be firm on their given commitments. E.ON expertise in Solar Thermal Plants or Concentrated Solar Power (CSP) was very limited and therefore E.ON needed an expert partner. Although E.ON was a financially strong company, it was not successful in setting-up new business out of its own ressouces. E.ON staff was perceived with excellent knowledge and expertise but missing spirit to implement projects and think pragmatically. As such E.ON projects were generally substantially delayed. In case of CSP there were mainly German companies (Solar Millenium, Siemens) and Spanish companies (Abengoa, ACS, Acciona) the market leaders. In a long selection process E.ON chose Abengoa as a possible Joint Venture (JV) Partner for their CSP business. Main reasons were the technology leadership, track record and position in the Spanish and global market. The Spanish government supported the CSP industry by granting sufficient subsidies for construction of 50 times 50MW plants in located in the south of Spain or 12,5 billion investment volume. Most plants were developed starting in the years 2005 and came to market after 2011. With regards to the technical details one 50MW plant required 110 hectars of land, 1000 construction workers during peak time, 35 km of parabolic mirrors, 55 km of heat transfer fluid piping. The parabolic through were assebled on site. Civil works were mainly completed by local companies and power block and supporting system (water, gas boiler, steam generator) were delivered from specialist companies across Europe. The large construction area, the complexity of the plant with its diversity in assigned works required a high level of project management. As part of that a risk assessment

concluded that the current level of Health and Safety Measure are insuffient to protect from casualties. Although the plant is part a prototype convoy there are a number of diviations from the planning so that the definition of „as-built“ versus „as-planned“ falls into place. As such this implies a deviation from the licencing of works. During construction phase the JV partners assigned responsibilities, which required contiuous realignment. Abengoa was responsible for construction and ECR for commercial matters and Health and Safety. In addition, ECR used their specialist from E.ON Spain and E.ON Engineering to ensure adequate quality of construction. As ECR intension was to understand the construction of such a plant it requested confidential data which Abengoa was reluctant to provide. E.ON Engineering and Abengoa engineers philosopy were not aligned with regards to rules and regulation, transperancy and speed to implementation. Abengoa engineers were in general from Seville where as the ones from E.ON where from Ratclif (Birmingham, UK), Gelsenkirchenkirchen, Germany and Madrid, Spain. The proximity of the construction site (Helioenergy is located in Ecija, Province of Seville) to Abengoa headquarters was an hour drive where as E.ON staff needed between 12 hours and 3 hours to site. During the planing phase of the JV not all negotiations with the neigbors could been concluded. The water pumping station from the nearby river to the waterreservoir needed a power line that crosses the neigbors land. Negotiation between Abengoa and the neighbor came to a halt so that the connection of the pumpstation was delayed. The plant was only allowed to refill the waterreservoir during the period of high water levels in the rainy season in February/March.

1. List the stakeholders during the phase of JV partnering and during construction? 2. Analyse the stakeholders according the power grid? 3. Add to the stakeholder analysis their interest? 4. Brainstrom possible alternatives to align the different interest to ensure the

projects objective.